As the tech industry continues booming, we are seeing an increase in the number of disputes between employers and past employees over intellectual property (IP). Claims made against ideas developed while under contract have the potential to undermine the foundation of startups. Prior to launching a company with material IP that could be contested, entrepreneurs should seek the counsel of a qualified startup lawyer.
Assignment Agreements in Company Contracts
Tech industry employment contracts typically have assignment agreements that apply to inventions developed while working for a company. In the majority of cases, these agreements assign the right to any work developed by an employee to the employer. The rights to the IP held by employers normally apply whether or not the work was performed on company equipment and whether or not it was done during business hours, with certain specific exceptions under California law.
Because of the contract clauses covering assignment, employees face risks when they take IP developed at a previous job and use it as the foundation of a new company. A past employer may file suit claiming rights to the intellectual property only after you have succeeded with a new venture. Other concerns relate to a startup’s source of funding. Investors may choose to pass on your company if they identify any issues with IP rights.
Avoiding the IP Trap
Because you have your hands effectively tied while working for another company, an experienced startup lawyer in Los Angeles will advise you on changing the situation. One tactic is to get an employer to specifically acknowledge that you are working on additional IP matters – unrelated to the employer’s business – that will be developed outside of business hours using your own tools.
Since this option is rarely agreed to by employers, an employee’s sole option may be to quit the company. Work done while still employed must be minimal — and never on company equipment – in order to safeguard against legal claims. Full documentation of the product’s development must also be observed. These steps offer the best chance at retaining IP rights and profiting as you should from your inventions.
When you have concerns about your IP, work with an experienced startup lawyer in Los Angeles such as Afshin Hakim of Hakim Law Group to protect your rights the right way. For further information or to schedule an appointment please contact us at 310.993.2203 or visit www.HakimLawGroup.com.